Managing Your Temporary Workforce and Avoiding Liability
There are numerous benefits to using a staffing service, including: time saved in
recruiting, interviewing, screening and selecting employees; the administrative
and cost savings of having another entity responsible for payroll, benefits, unemployment
and workers' compensation; flexibility to meet fluctuating staffing needs; utilizing
as a source for prospective full-time hires; and reduced exposure to employee lawsuits.
While not all forms of liability can be entirely eliminated by using a staffing
service as your source for labor, there are some simple steps companies can take
to avoid liability, particularly when a question of "joint employment" arises.
Joint employment (or "co-employment") exists where an employee performs work that
simultaneously benefits two or more employers, e.g., the staffing service and the
client, and typically involves both entities being held responsible as an "employer"
of the particular employee.
With the preceding overview in mind, the following is a brief review of typical
staffing service/client company responsibilities, followed by commonsense strategies
companies can take to help avoid being found to be a "joint employer," which in
turn will help to reduce liability.
Generally, both the staffing service and the client company exercise some level
of supervision and control over the temporary employee. However, the staffing service
generally hires the temporary employee, pays their wages and makes decisions regarding
discipline and discharge.
The client typically supervises the temporary employee's day to day work, determines
working conditions and hours of work, decides whether the temporary employee will
continue on the assignment or is sent back to the staffing service, may participate
in decisions regarding discipline and may be involved in determining the rate of
pay to the temporary employee.
However, while the staffing service will typically be found to have certain specific
responsibilities when any question of joint employment or co-employment arises;
both the staffing service and the client company may share responsibility on some
liability issues, as discussed below.
Staffing Service Responsibility
Some areas of responsibility rest primarily with the staffing service. These include:
- Payment of wages/compliance with wage and hour laws
- Workers compensation
- Unemployment
- I-9 employment verification
-
Employment Taxes withholding
Staffing Service / Client Joint Responsibility
Some areas of potential responsibility fall jointly between the staffing service
and the client in certain circumstances:
Liability For Unsafe Working Conditions
CAL/OSHA Guidelines for the contingent workforce state that secondary employers
(companies utilizing temporary labor) must provide temporary employees with a safe
and healthful workplace and will be held responsible for their exposure to health
and safety violations.
Both entities are responsible for ensuring that temporary employees receive adequate
safety training. Typically, the primary employer (the staffing service) is responsible
for providing general safety training.
The secondary employer (the client) generally provides training specific to the
job site. Where personal protective equipment is required, the client is generally
expected to provide such equipment, along with appropriate instruction on its use.
The client should also provide temporary staff with information on the company's
Illness & Injury Prevention Program (IIPP), Emergency Action Plan/Fire Prevention
& Hazardous Communication Program including MSDSs (Material Safety Data Sheets),
if applicable.
The staffing service will typically conduct an initial worksite inspection to ensure
temporary employee safety. If an accident or injury occurs, the client and the staffing
service should work together to conduct an investigation to determine the cause
and avoid future occurrences.
Discrimination
State and federal legislation prohibits employment discrimination on the basis of
age, race, ethnicity, gender, disability or other protected status. The Equal Employment
Opportunity Commission (EEOC) has issued guidelines confirming that both the staffing
service and the client may be held liable for discriminatory actions with respect
to temporary employees.
For example, if a client makes a discriminatory staffing request that is honored
by the staffing service, both entities can be found liable for discrimination. Likewise,
if a client instructs the staffing service to end a temporary employee's assignment
for a discriminatory reason and the staffing service complies with this request;
both entities may be held liable.
Of course, the risk of a lawsuit is reduced when using temporary employees due to
the reduced expectation of permanent employment. Monetary damages in the form of
lost wages are also reduced when the staffing service can place the employee in
an equivalent position without significant delays.
Under the Americans with Disabilities Act (ADA), the duty to provide reasonable
accommodation for disabled workers is primarily that of the staffing service. However,
the client has a duty to accept and reasonably accommodate a qualified individual
(e.g., a visually impaired temporary employee with an adaptive device for a data
entry position).
The standard for determining whether a particular accommodation is reasonable should
take into consideration the temporary nature of the employment (e.g., the client
would not be expected to make significant structural changes to the working environment
to accommodate a disabled employee on a short-term assignment).
Sexual Harassment
The staffing service as primary employer is required to have a sexual harassment
policy, including appropriate complaint and investigation procedures. The client
has an obligation to provide a workplace free of sexual harassment.
In the event of a sexual harassment complaint by a temporary employee, the client
should cooperate with the staffing service in conducting an investigation, including
interviewing witnesses. If the complaint is substantiated, the client should take
appropriate and prompt remedial measures to end the harassment.
Both the staffing service and the client are prohibited from retaliating against
a temporary employee who has made a claim of sexual harassment (e.g., ending the
assignment or terminating their employment).
Family and Medical Leave
Under the federal Family and Medical Leave Act (FMLA), there is a presumption of
joint employment with respect to temporary employees. This means that temporary
employees will be counted in determining whether the client meets the 50-employee
threshold for coverage under the Act.
Also, time worked by a temporary employee prior to their conversion to the client's
payroll will count toward the one-year/1,250 hour service requirement for leave
eligibility. The staffing service, as primary employer, is responsible for complying
with all FMLA notice requirements for temporary employees. The client may have an
obligation to accept back a temporary employee who is returning from FMLA, as long
as the position is still filled by a temporary employee.
Temporary employees will typically also "count" as regular employees in determining
whether the client meets the threshold number of employees to trigger compliance
with other employment laws, such as Title VII, the Age Discrimination in Employment
Law (ADEA), the Americans with Disabilities Act (ADA) and the Worker Adjustment
Retraining and Notification Act (WARN).
Invasion of Privacy
Certain actions by employers such as drug testing, searches, electronic monitoring,
etc. may give rise to employee claims for invasion of privacy or other claims. Appropriate
consent is important to reduce the employee's legitimate expectation of privacy
in these areas.
If the client requests pre-employment drug testing and/or criminal/credit background
checks as part of the screening process for temporary employees, this should be
coordinated through the staffing service as employer. The appropriate consent forms
should be signed by the temporary employee authorizing disclosure of the results
to the staffing service and the client.
If the client has a policy of post-accident or reasonable cause drug testing, this
policy should be communicated to the temporary employees to reduce any expectation
of privacy. The temporary employee should acknowledge in writing that they are subject
to that policy while on assignment.
Likewise, if the client has a policy with respect to surveillance, searches, monitoring
of e-mail or voice-mail, etc., the temporary employee should be made aware of these
policies as well.
Employee Benefits
The common assumption is that the staffing service as employer is responsible for
providing temporary employee benefits, if any. However, some courts have concluded
that temporary employees may have a claim to participate in the client's benefit
plans, as "common law employees" of the client.
Companies using temporary employees are urged to carefully review their benefit
plan language and definitions of eligibility to clearly exclude temporary employees
whenever possible.